Samsung Pay has finally been released in the United States, a month after its successful debut in South Korea, but can the payments platform capture the US market and overcome Apple Pay?
The wait is finally over
In March this year, the Korean technology firm announced the launch of its ‘ground breaking mobile payment service’.
Leveraging both Near Field Communication (NFC) and Magnetic Secure Transmission (MST) technology, Samsung customers will be able to make secure payments at a number of locations across the United States.
The consumer electronics giant officially launched Samsung Pay on September 28th and it has already gained support from three major national banks.
Citi, Bank of America and US Bank have agreed to integrate the technology into their card schemes, so customers who hope to use the platform will have to own a MasterCard, Visa or American Express card which is issued by one of the three banks.
‘‘Being one of the first to offer our cardmembers and merchant customers Samsung Pay is a great example of our focus on our customers,’’ says Dominic Venturo, chief innovation officer at US Bank.
‘‘This is an important step in the continuing evolution of payments and consistent with providing our customers the convenience of doing business with us how, when and where they want,’’ continued Venturo.
For those worried about potential security issues when using the contactless payment tool, fear not. Samsung Pay uses digital tokenisation and fingerprint authentication to bolster its platform’s security measures. The payment service will also be using Samsung Knox, a new security solution designed for Android operating systems.
This is a feature that David Poole, business development director of authentication firm myPINpad welcomes, but he believes security threats will continue to plague payment devices.
‘‘I don’t think security ever stops, because no matter how high you raise the bar, there are always people out there who want to break security measures.’’
‘‘It’s an ongoing battle between technology companies and hackers, but I think that Samsung’s move into mobile payments is a very positive move. The potential for authenticating and securing these transactions is much greater now that 4G phones and tablets are accepting payments.’’
In terms of the future of mobile payments, Poole believes that Samsung has a fighting chance of competing with both Apple and Android Pay.
‘‘I think it will depend on what market Samsung is going after. Apple tends to appeal to consumers which have the most spending power, which means that there is a huge opportunity in the Android market, which is where Samsung is based.’’
‘‘The Android space is significantly bigger than Apple’s, so there is huge opportunity for growth. My view is that Samsung will the choice for many Android users, their penetration in payments could match their market share of handsets.’’
Full of confidence
Samsung will be full of confidence during the US launch of its payment product, after witnessing successful results in Korea during its first month in the consumer market.
Users have already spent over $30m in the first 30 days of its release. Samsung has put the results down to a wide acceptance rate with Korean merchants.
More than 1.5 million total transactions have taken place to date and approximately 60 per cent of purchases have taken place on the Galaxy Note5 smartphone.
The technology firm will be looking to replicate this success in the states, where its payment tool will be available on Galaxy S6, S6 edge, Note5 and S6 edge+ devices operating on AT&T, T-Mobile, Sprint and US Cellular networks.
Samsung will be taking on Apple Pay for the title of best mobile payment service. The California-based company are currently winning this battle having released Apple Pay in late 2014.
Apple CEO Tim Cook announced that more than one million credit cards had been registered on Apple Pay in the first three days of its availability, signalling the firm’s dominance within the sector.
Samsung will be aiming to force it way up to the top of the mobile payment charts, and has already been on the PR warpath while promoting Samsung Pay.
During the 67th Primetime Emmy Awards, Samsung released a new advertisement showcasing its new payment platform. Halfway through the ad a customer attempts to use Apple Pay on a Samsung reader, but quickly gets rejected by the cashier.
Android users are certainly ready to experience a new way to pay. This week Payment Eye brought to you a report which found that three quarters of Android users are open to using their smartphone to pay for items, but just three per cent would consider using Apple Pay.
The Helixion study surveyed consumers from five different countries, and found that smartphone users are open to using either Android or Samsung Pay. This all makes for interesting viewing for mobile payment insiders; in time we will see whether Samsung Pay can be a success.
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